Brazil central bank official Aquino said the bank expects to take significant measures in coming months to help the financial system address debt stress from high-cost credit.

RaboResearch said energy prices have continued to rise, yet U.S. and European 5y5y inflation expectations remain roughly anchored at central-bank targets. The correlation between energy moves and long-term inflation pricing is weakening; markets currently appear to trust central banks to keep long-term inflation anchored. RaboResearch offers an alternative: long-term inflation expectations may be shifting to reflect central-bank credibility, fiscal policy and institutional risk more than short-term oil shocks. It highlights fiscal-dominance risk — if markets doubt central-bank independence, long-term inflation pricing could undergo a sudden, non-linear institutional repricing. For markets, the current stable 5y5y supports policy credibility; but if energy stays elevated and fiscal risks rise, whether long-end inflation expectations and term premia remain muted will be the key watchpoint, and long-dated USTs’ reaction to oil/inflation shocks may better reveal if anchoring still holds than monthly CPI prints.

Local medical personnel said Israeli air strikes on Gaza City killed three Palestinians.